“The one who seeks answers to the problems in logistics should always look at the data,” says Shannon Vaillancourt, president and founder of RateLinx while adding that only with perfect knowledge of them, as well as the ability to interpret them, a company is able to resolve high costs for transportation, long transport durations and wrongly set fees. 

“Many shippers have good rates, but they aren’t using them correctly, which causes a problem of spending too much. Having the right data will show how to change this,” says Shannon Vaillancourt. And data is the thing that could contribute to revealing the problem and come up with a solution. What are the best data, according to Shannon Vaillancourt?

Above all, we need to examine why the specific carrier was selected for the specific package. Why was it necessary to speed up its delivery? And why was there an underestimation of the transportation costs? To answer these questions, the logistician needs to know the exact details about the consignment, transportation costs and information on the level of individual items’ order.

Then it’s possible to verify what really happens during transportation: whether there were changes after the consignment left the warehouse (due to bad weather, problems with loading etc.); whether it was a one time or repeated order; whether the item required special treatment.

With the analysis of (not only) the mentioned findings, it’s possible to identify how much the carrier is able to fulfill the strategy, what factors influence the ability to do so and how much it costs the company. The two most popular indicators are called Lost Savings that describe how much it costs when the strategy is not adhered to, and Lost Savings by Constraint that reveals how much it costs the sender. “These two analytics help a shipper successfully implement a strategy by ensuring their Lost Savings is zero, and will show which routing rule should be examined when developing the next strategy,” explains Shannon Vaillancourt.

According to him, return on investment in data and analytics can be almost immediate: ”We see many shippers throttle their own strategies to fit their current systems. Once you have data, it’s easy to make the business case internally to make the strategic changes that are found in the data.”